The S & P 500 has not fallen more than 3% since November 2016. The longest period in history, while indexes continue to break records. Winning Streak Continuing with historical closures until January, it would also break the historical record of 394 days of operation established in the mid-1990s.

The race is on Wall Street

Even the best marathon runners need to take a breather eventually. Stocks in the New York stock market have risen since the election of President Trump with hardly any setbacks. That’s very unusual, the market declines are normal and healthy, even during the historic bull runs.

However, the S & P 500 has retreated 3%, neither in a single day nor for several days, since the beginning of November 2016. This is the longest period of calm in history, breaking the record since the mid-1990s. 1990, according to Bespoke Investment Group.

And we must go back to June 2016, weeks before Trump got the Republican presidential nomination, to find the last time the S & P 500 suffered a 5% setback.

If that streak continues until January 22, a real possibility would also break the historical record of 394 days of operation established in the mid-1990s, according to LPL Financial.

“We have been extremely spoiled by the action (or lack of action) over the past year,” Ryan Detrick, senior market strategist at LPL, said in an e-mail. “To think that 2018 will be as calm as 2017 could be quite silly.”

Peter Oppenheimer, director of global equity strategy at Goldman Sachs, told Bloomberg on Wednesday that “a correction is potentially overdue.”

Extreme calm has drowned Wall Street. The VIX, which measures market volatility, recently closed at its second-lowest level. The CNN Money Fear and Greed Index that measures market sentiment is showing “extreme greed”.

And as the Dow hits a milestone – it took just a month to go from 24,000 to 25,000 units – concerns grow that the market is about to overheat.

Some analysts have warned of a so-called melt-up (market warming), an unsustainable race to the top that is not based on fundamentals. The Dow and the NASDAQ have risen approximately 38% each since the election of President Trump in 2016. Even corporate executives may be more cautious about the market.

84% of financial managers surveyed by Deloitte say that US stocks are exceeded. That is the highest figure since the Deloitte survey began in 2010. Only 2% believe that the shares are a bargain.

The figures suggest that companies should be reluctant to use most of their tax law savings to repurchase their own shares.

Investors who lost a lot of money during the terrible market crisis in 2008-2009 certainly do not complain about the tranquility. And there are reasons for good times on Wall Street.

The economies of the United States and the world are performing excellently. Even Europe is on the rise. Corporate profits have never been so strong, and the new tax law should boost profits. The Federal Reserve has not abandoned its plan to raise interest rates gradually.

WHAT COULD DISTURB THE CALM ON WALL STREET?

An obvious threat is a nuclear confrontation with North Korea. Although North Korea and South Korea began talks, tensions are always just a missile launch – or a tweet – far from escalation.

The BlackRock geopolitical risk indicator, which tracks how frequently geopolitical concerns are mentioned in media and brokerage reports, has risen to the highest level since March 2015.

Although they may be frightening, geopolitical events tend to have only an ephemeral impact on the stock market because they rarely derail global economic growth.

A geopolitical risk that would threaten the rejuvenated world economy is a commercial war. A confrontation between the United States and China or the collapse of NAFTA could shake the market and the economy.

“We are more concerned about the potential of a United States protectionist approach to trade,” Richard Turnill, head of the investment strategy at BlackRock, wrote in a report this week.

Another recent concern: bond rates have been increasing. For years, extremely low rates have forced investors to look for higher risk assets such as stocks. Although the 10-year Treasury bond is still very low at 2.56%, a rapid increase in rates will probably affect Wall Street.

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